Car market leader Maruti Suzuki is working on its first diesel commuter van, an 800cc diesel version of the Eeco, with plans to launch the model in 2016. The diesel Eeco, largely intended for commercial applications in fast growing rural/semi-urban markets, will look to challenge Tata Motors and M&M, strong players in the low-cost passenger carrier segment.

As the Eeco is currently only available with a petrol or CNG engine (1.2 litre), the addition of a diesel version is expected to give a strong boost to Maruti’s volumes in the many markets where CNG is not available (CNG is only available in about 15 cities today). The Eeco, which is currently priced starting R2.98 lakh (ex-showroom, Delhi), will thus be able to compete more aggressively with Tata’s 700cc diesel Ace Magic and M&M’s diesel Maxximo, both of which are priced from around R3.3 lakh.

“Maruti is working to adapt the 800cc diesel engine, its first self-developed engine, for the Eeco van. The engine will first be launched in the new Maruti LCV (codeY9T) and the Celerio this fiscal,” a source close to the development told FE, while adding that the Eeco will progressively replace the Maruti Omni van as well.

A Maruti official confirmed the increased focus on rural market, adding that as the car demand in urban market stagnates, the share of its rural sales is growing fast. “Today, the share of rural markets in total volumes stands at around 32%, from about 28% two years back and low single digits in 2008,” the official said. Top sellers in these markets are models like the Alto, WagonR, Omni and Eeco.

When asked for details on the diesel model plans over an emailed questionnaire, a Maruti spokesperson said, “The company does not give guidance or comments on future products”. Volumes for the Eeco fell 6.4% to 37,951 units in FY14, while Maruti’s overall domestic volumes were largely flat (up only 0.25%) at 10.53 lakh units.

V G Ramakrishnan, MD at Frost & Sullivan, South Asia, said the diesel Eeco will also give Maruti an entry into new segments like call centre cab operations in cities. “Till now Maruti has not been able to enter several segments, and this will help plug one of those gaps. The only way to logically expand the Eeco range was to add a diesel, especially when the economics of CNG is not working out anymore with rising prices.